Transition Planning

Since growing your business has been your main priority over the years, it is hard to think about letting go and allowing someone else to take over. Contemplating the process can be overwhelming for a number of reasons: knowing where to start, is just one of them.

Our experienced Business Consultants are uniquely qualified to assist your specific situation. Tough decisions regarding transitioning your farm or business to a family member or potential buyer require honest discussion. Our step-by-step approach covers all aspects of your business and the family members it will affect. We ensure that your retirement is what you hoped it would be, and that the life of your business is set to succeed with the new ownership.

We understand that value is more than just dollars and cents when it comes to transitioning or selling your business. Let us assist you with the complexities that surround this decision-making process.

This is the foundation of the transition plan. Considering the vision, goals, and objectives of everyone involved in the transition including stakeholders, family dynamics, and possible conflicts is the first step. Considering desired lifestyles and expected costs for those exiting the business and for those taking the business over is also something we discuss with you. All while ensuring we keep in mind the consideration of the business vision, near and long term goals.

Understanding your personal net worth will ensure there are no unreasonable expectations built into the transition plan. It’s not uncommon to find that the transitioning individual(s) most significant asset is the business that they are transitioning; this is why valuing the business is important.
Once personal and business value is determined we will have the guidance we need to provide guidance surrounding how much you should sell your business for, required dividends, or other compensation from the continuing business to meet personal retirement financial needs.

We have outlined the financial goals in step 1; now consider the funding requirements to meet those goals. Understanding the available cash flow after considering the projected profit and debt service obligations, dividend strategies, and capital purchase will provide us a balance that allows us to build your Business Financial Plan.

This step in the transition plan ties everything together; your vision and goals combined with net worth and cash flow. Then the effect of private and government pensions, RRSP’s, LIRA’s, RRIF’s, etc. on the overall cash flow and income tax strategy are considered.

Taking into account all the steps prior, we also discuss the following with you:
• Considers ownership transfer
• Considers management transfer
• Considers training of the successors
• Considers timing of transfers, responsibility and accountability
• Considers income tax effective methods to transfer or reorganize

It is important that all stakeholders are aware of the plan, not only key stakeholders. Legal accounting and financial advisors, banking institutions, and suppliers should all be provided with applicable information to ensure a seamless transition.

Considering the “what it’s” and being prepared for them is the final step in ensuring the plan is set up for success. We will consider potential risks to the plan and undertake a discussion on whether the risk is accepted or mitigated in some manner.

Subscribe to our newsletter

Sign up now to get advice about tax deductions, growing your income and managing your finances delivered straight to your inbox.